A developer is reporting that Google has banned his tethering application from the Android Market, one of the first hints that the store may not be as open as Google has promised.

WiFi Tether for Root Users, an application developed by Seth Lemons and a partner, has been banned from the market for violating the developer distribution agreement. The application lets users connect their G1 Android phones via Wi-Fi to their laptops and then access the Internet from the laptop using the phone's cellular connection.

In a letter to Lemons' partner, Google states that the application violates the developer distribution agreement. It cites a section that says Google may remove an application if it violates the device maker's or the operator's terms of service. The letter then points to T-Mobile's terms of service, which expressly forbid tethering phones to a computer. T-Mobile is the only operator in the U.S. to sell an Android phone.

The tethering application was on the Android Market for a few weeks and had more than 10,000 downloads and a 4.5 star rating from users, Lemons said.

The move is notable because Google has promoted Android and the Android Market as being open. Developers do not have to submit applications for approval; they simply pay $25 to become part of the developer program and then they can upload their application to the market.

Because the idea is that there will be one Android Market to serve all future phones based on the operating system, this incident raises some interesting questions, Seth notes in his blog. "Does this mean that apps in the Market have to adhere to the ToS for only T-Mobile, even when other carriers sign on? Will all apps have to adhere to the ToS for every carrier that supports Android phones?" he writes.

The tethering application can only be used by people who had enabled "root" access to their G1 phones. The developer versions of the phone are rooted but regular users also can enable it, in exchange for some downsides including lower security.

People commenting on a story about the incident reported by the Android Community Web site note that G1 users can download applications directly from developers, circumventing rules that may prohibit apps from the Market.

Google has not replied to a request for comment on the matter.

Tethering applications have also been denied from Apple's iPhone App Store, but that store requires applications to submit to a review process and appears to have more strident rules.